As the global oil supply imbalance shrinks and supply expands faster than demand, economist-lawmaker Joey Salceda said yesterday he expects monthly oil price rollbacks for the remainder of the year.
"With the US Federal Reserve maintaining its policy of gradual rate hikes, and with domestic pressure among US leaders to increase oil supply, as well as global adjustment to a stalemate in Ukraine, I expect net price reductions on oil prices every month for the rest of 2022," said Salceda, citing the oil futures data.
According to the Albay solon, Filipinos who are net oil purchasers in the world market can expect slight to moderate relief in oil prices.
The House Ways and Means Committee chairperson said the July oil supply deficit was at its lowest level for 2022, at about 600,000 stock tank barrels.
He added that while the demand only increased by 0.07 percent in July, oil supply increased by 0.28 percent.
Salceda, a former investment analyst for global banks, said he expects something similar to the recovery post-Global Financial Crisis, when oil prices peaked in April 2011, before settling down by September the same year.
"I see it as possible that global crude prices could go below $80 for the first time by October this year. From there it will play between 80 and 95 until global tensions ease permanently," he explained.
Salceda, meanwhile, urged the government to focus its efforts on agriculture because there will still be some effects on food prices, as agriculture input prices are still high, although declining.
He said that the government can instead focus on lower food prices during the "crucial month of September."
"September will be very critical. Planting season for rice starts. Some milling of sugar is already happening. And corn domestic supply is supposed to begin narrowing this month, as planting takes place next month," the solon stressed.
He emphasized the importance of fertilizer, financial aid, and irrigation upkeep this month to secure a bountiful rice crop.
Salceda disclosed that he spoke with DA Senior Undersecretary Ding Panganiban, who said that healthy domestic rice production this season will help ease the effects of higher expensive rice imports.
"What we do in September 2022 will affect is in food prices in May 2023. So, we better get these next 30 days right," said the solon.
